What is the political economy? The term political economy is one that has been severely misused in liberal discourses in such a way that there is now a vast divide between what it is believed to be and what it truly is. To the liberal, the political economy simply means the interplay between the opposing forces of private industry and of the state. Specifically, the liberal believes that the state has power over private industry, and private industry must respond to it, whether that means to support said state’s regulations and laws, or to undermine them with lobbying or other means. This is the full extent of the liberal understanding of the political economy, where the state is treated as the fountainhead of all rules of production, casting private industry as the responder, the secondary actor responding to the first.  While this framework includes both politics and economy, it does not reach the truth of the component forces of political economy in the bourgeois system. The political economy as understood by Marxists, however, deals with all interactions between productive and consuming forces in their entirety, not just the interactions of state and business. 

The political economy, according to Engels in both Anti-Dühring and in Outlines of a Critique of Political Economy, is a historical science that addresses production, exchange, and distribution in any organized social system. These  aspects of political economy are on one hand tied together, and on the other, wholly separate. The act of production begets systems of distribution and exchange for whatever is produced. Production as an act can exist on its own, according to Engels, but this is not so for distribution and exchange, as these require the products to exist for these activities to take place. This relationship, on a singular level, is linear, as it begins with the production of a good, and ends with the consumption of said good. A coat would not be created if there was no need for an individual to own and use a coat. 

When we discuss these forces on the social level, we see that consumption and production are also linked in a cyclical relationship. Production is undoubtedly required for consumption to take place, as without something produced, there would be nothing to consume, but at the same time, consumption is required for production to be needed, or, more properly, the desire to consume is required to create the conditions for production to take place. Going back to the coats, there would be no coats if there was no need for coats, whether that need be as important as cold weather threatening the lives of society, to something as superfluous as the desire to have a beautiful coat. These desires drive production, and without them, the economic cycle would never start. This connection between production and consumption forms what Engels discusses as a use-value, a good which is made to be used in some way, no matter how important that use is. This is the political economy in its entirety, a historical science that describes the relationship between production, consumption, and distribution. The modern bourgeois state, as stated by the liberal definition of the political economy, is but one player in these actions of production, distribution, and exchange, and is a late entry at that, as the history of political economy predates both the state and private industry in their modern senses.

To fully understand the modern bourgeois political economy, we must start at the beginning. In hunter-gatherer societies, the production-consumption cycle was highly individual, where the hunter or gatherer would create their own tools, and process their own products for either personal or communal use. The singular person would fashion their own knives and bows, and the community would come together to process the meats and hides to be distributed to the entire community. This would work for a time, as the productive cycle would be largely small-scale. As communities began to grow, however, the need for production to increase would be felt, and the division of labor would need to develop. This would lead to new forms of production and consumption, where the work of skinners, tanners and the like would need to be transformed into singular tasks in their own right, thus leading to the first instances of divided labor.

These trends of division and increasing complexity in production would continue to progress as the hunter and gatherer became the agriculturalist and the pastoralist. The need for new resources, such as grain and charcoal, would again lead to new jobs being performed, and with that, a new form of distribution. Where the community would once share all products equally, we would now see the marketplace take form, and exchange become prominent. This would lead to another new system of political economy, where the productive cycle would now include the act of exchange in the distributive effort. With this, consumption would change as well, where once the community would consume products as a singular force, now the exchange of goods and services would reign supreme. The baker would trade bread for the farmer’s grain or the shepherd’s meat, while the potter and other artisans would arise, where their services would be needed to accompany the growing economy of this era. These new jobs would focus on the needs of the time, and their goods would be traded just as food was. Without a pot to cook in, or leather to transform into clothing, there would be no use for the grain and hides the farmer or shepherd could provide. This is emblematic of the cyclical nature of production.

However, this increased production required additional resources, control of which led back to the political part of the political economy. The immense resources required to create productive infrastructure such as grain mills, together with the threat of that infrastructure being taken by other social groups, led to the rise of the first feudal structures, as the petty rulers of farming towns expanded into the pharaohs and priest-kings whose names have been passed down from antiquity. The development of this ruling class naturally shifted the distribution of produced goods, as those that held power over the producing class consumed goods and services at a far higher rate, often to the detriment of the producing class. They also led to profound shifts from the new demands of that ruling class, for would there be a need to produce the Great Pyramid of Giza without the demands of a pharaoh?

Eventually, however, the systems of production would change in some societies, as new collections of highly skilled specialists would begin to form organizations to represent their interests under the feudal political economy.This would lead to the formation of monopoly charters and guilds, which would form in the new towns which were the centers of new productive activity. From this economy would come the burghers, who would begin to act as middlemen in the distributive process, impacting the political nature of distribution. Not only this, but the burghers would also begin to gather the propertyless peasants as workers, and in turn, the wage worker would become an established part of the productive process. At the same time, the feudal system of the countryside would become firmly established as well, with serfs acting as agricultural slaves to the lord’s estate. This would begin to shift into a form of proto-capitalism, where the towns would be capitalistic in nature, in that the bourgeoisie would control the economy of the town, but the feudal lords would still retain both political and economic power within the countryside and capitals. The kings and lords would still have the final say in the makings of the economy as well, as they were still the rulers of these societies-the bourgeoisie had not yet come to be the ruling class.

This system would persist in this state for a time, but soon the contradictions of this political economy would begin to show. It was simply much more lucrative to live in the towns and cities than to live as a serf, and many serfs knew this. The serfs would begin to desert the countryside to become a member of the wage-paid city workers, which would, in time, lead to bourgeois dominance of the entire political economy, despite the king’s and lord’s de jure control. The bourgeoisie would begin to question the system of kings and feudal lords, and, again, in time, they would revolt. These bourgeois revolutions would shatter the contemporary system of the political economy, that of the feudal system, and a new one, capitalism, would arise. The political economy would then shift, to where the bourgeoisie would have control of both the productive forces, as well as the distributive forces. The bourgeoisie would control the flow of exchange, where the propertyless working class would be left wondering, “where is our share?”

The success of the bourgeoisie in assuming their status as the ruling class would lead to socialist critiques of the capitalist system, which would develop over time into Marxism and Communism. The propertyless working class, left unsatisfied by the propaganda of bourgeois superstructures, would begin to desire the ability to control their own productive force, and consume goods at the same level as the bourgeoisie, who did very little besides decide exchange, distribute, and consume the results of production much as the previous ruling class did. Simply put, the ones who provide production again wanted to see their fair share of the distribution of the goods they produced, as opposed to the exchange and distribution of those goods being monopolized by the bourgeoisie.

With all that being said, the political economy of one locale can be completely different from another. Engels makes it clear that the political economy of two societies can be vastly different, even at the same time in history -indeed under the rulerships of bourgeois colonialism, the global capitalist political economy depends on those disparities. The political economy is, by its very nature, an ever changing relationship between production, distribution, and consumption within any given social unit. There is no inherency to the political economy of any given time or place, as it changes with the material conditions of the locale. An example Engels states is that the inhabitants of Tierra del Fuego, at the time of his writing of Anti-Dühring, would have no concept of stockbrokers or the like, as their political economy was not developed in that way. That being said, with the advent of the internet and widespread globalization, we have seen the establishment of a near-global political economy, accelerated at a level far beyond that of prior global colonial endeavors. The political economy of many locales are now or have been forcibly transformed to conform to the hegemonic structure of the United States in its role as the lead power of global capitalism. While this would not be the first time that the political economy of any given locale had been forcibly changed to conform with another, it would be the first time we have seen the conditions of economic participation require the political economy of the world to work within a certain framework, that is, the American framework.

This could mean many things. To start, we could see for the first time an absolutely global political economy, one that conforms entirely to a singular country’s standards. This would most likely be disastrous, as this transition is not one of equality, but that of control, which must necessarily be unequal. The United States and the Western World is now almost entirely in control of the world’s political economy, save for their economic enemies, such as China and Russia, which are building their own peri-capitalist system as well, and small, isolated areas, such as North Sentinel Island, which is protected from this very thing by the Indian government. This, however, has not stopped many missionaries or otherwise from forcing their entry into these societies to haul them into that global system, which could be considered a microcosm of the capitalist need for constant expansion.

Ultimately, the only remedy for this global capitalist imperialism would be the establishment of a socialist order. Moving past capitalism into socialism would see the socialist critique of Capitalism finally realized, and would allow for the progression of the political economy everywhere to be one of equality and needs-based distribution and consumption. Under this new system, we would no longer have a situation where goods would be created solely to sell (the commodity form) and instead, goods would be made to be used by the people. We would see the growth of necessary goods, without the superfluous creation of too many variations of the same thing, sold to us at ridiculous prices. The very makeup of society would change to benefit the worker, as opposed to the seller. This, however, is not possible without revolution.